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The financial crisis of 2007–2008, also known as the Global Financial Crisis and 2008 financial Crisis, is considered by many economists to be the worst financial crisis since the Great Depression which began with the stock market crash in 1929. This was a worldwide crisis that continued until the late 1930’s for most countries and as late as the mid 1940’s for others.

October 29, 1929, which later became known as Black Tuesday, began a period when personal income, tax revenue, profits and prices dropped precipitously. International trade dropped by more than 50% and the unemployment rate in the United States rose to 25%.

Historians point to structural factors such as major bank failures and the stock market crash, while monetarist economists tend to assign the blame to monetary factors such as the actions taken by the Federal Reserve to contract the money supply and Britain’s decision to return to the gold standard at pre-World War I parities (approximately $4).

Credible arguments have also been made that loose credit caused over-indebtedness and and deflation. The over-indebtedness also fueled market speculation and asset bubbles. During the Great Depression, margin requirements were only ten percent (10%). As the stock market crash caused brokerage firms to make margin calls on investors who bought securities on margin, the banks were overwhelmed as these investors all sought to withdraw their funds at once. Banks began to fail as debtors defaulted on their debts and depositor withdrawals resulted in a run on the bank. By April of 1933, approximately $7 billion in deposits had been frozen in failed banks.

In a recent article written by Karen Freifeld and Aruna Viswanatha entitled: New York to sue BofA, Wells Fargo over mortgage practices, is reported that The National Mortgage Settlement, the largest consumer financial protection settlement in United States history (see), was brokered between the banks and 49 state attorneys general.

New York Attorney General Eric Schneiderman said on Monday he intends to sue Bank of America and Wells Fargo for violating the terms of a settlement designed to end mortgage servicing abuses.

Last year top banks reached an agreement about providing $25 billion in relief to homeowners and comply with a set of servicing standards to make amends for foreclosure misconduct. But as it turns out, the obligations of the deal are not carried out as expected.

According to Eric Schneiderman, 339 violations of standards dictating the time-line for banks to process mortgage modification applications has been documented since October 2012. Wells Fargo allegedly violated the servicing rules 210 times, while Bank of America allegedly violated the terms 129 times.

Bank of America has reported profits have been hit by legal costs.

For the last three months to the end of September net income came in down at $340m. It used to be $6.2bn in the same period last year. The bank took a $1.6bn charge for litigation expenses.

The bank has already paid $2.4bn to settle a lawsuit that had been brought by shareholders who said they had been misled about the acquisition of Merrill Lynch by Bank of America. The acquisition occurred during the financial crisis.

Shareholders argued that Bank of America made misleading statements concerning the financial health of the two banks. However, Bank of America claims it did nothing wrong.

Bank of America warned that it would be hit by a pre-tax loss of $1.9bn and an additional $800m in charges due to changes in the UK corporate tax rate.